Why Is UBS (UBS) Up 2.2% Since Last Earnings Report?

A month has gone by since the last earnings report for UBS (UBS). Shares have added about 2.2% in that time frame, underperforming the S&P 500.Will the recent positive trend continue leading up to its next earnings release, or is UBS due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. UBS Group Q3 Earnings & Revenues Increase Y/Y, Expenses DeclineUBS Group AG reported a third-quarter 2024 net profit attributable to shareholders of $1.42 billion against a net loss of 715 million in the prior-year quarter. Results were driven by the strong performances of the Global Wealth Management (GWM), Asset Management and Investment Bank divisions. The decrease in operating expenses was another positive. However, an increase in credit loss expenses was a headwind.UBS Group AG's Revenues & ExpensesThe company’s total revenues jumped 5% year over year to $12.3 billion.Operating expenses decreased 12% year over year to $10.3 billion.UBS Group AG reported total credit loss expenses of $121 million, which increased 27.4% from the year-ago quarter.UBS Group AG’s Business Divisions’ PerformanceIn June 2024, UBS Group AG announced that it would re-align its wealth management business to improve its offerings to ultra-rich clients. Starting July 1, 2024, it established a division known as GWM Solutions to consolidate different products for clients. This new unit has alternative products from its wealth and asset management businesses, including real estate and private market investments.GWM’s third-quarter operating profit before tax was $1.1 billion, up 17.2% year over year. This was driven by higher recurring net fees and transaction-based income.Asset Management’s operating profit before tax of $151 million surged from $37 million reported in the year-ago quarter. The rise was mainly driven by net gain from the closing of the remaining portion of the sale of the company’s Brazilian real estate fund management business and the sale of its shareholding in Credit Suisse Insurance Linked Strategies Ltd.Personal & Corporate Banking reported operating profit before tax of $846 million, down 11.6% year over year. The fall was due to lower revenues.The Investment Bank unit reported an operating profit before tax of $405 million against the operating loss of $254 million in the year-ago reported figure. The improvement was a result of higher total revenues and lower operating expenses.Non-Core & Legacy incurred an operating loss before tax of $603 million in the reported quarter compared with a loss of $1.17 billion in the year-ago quarter.Group Items reported operating profit before tax of $45 million against a loss of $89 million in the year-ago quarter.UBS Group AG's Capital PositionTotal assets increased 4% from the previous quarter’s end to $1.62 trillion. UBS Group AG’s return on Common Equity Tier 1 (CET1) capital was 7.6% as of Sept. 30, 2024, against negative 3.7% as of Sept. 30, 2023.The risk-weighted assets declined 4.9% year over year to $519.4 billion.The CET1 capital declined 3.5% year over year to $74.2 billion. As of Sept. 30, 2024, the company's invested assets were $6.2 trillion, up 15% year over year.Outlook2024The company expects 2024 NII will be roughly flat versus 4Q '23 annualized. This includes a low to mid-single-digit sequential drop in the third quarter driven by a decrease in volumes, mix shifts in anticipation of falling rates, and the impact on replication portfolios.Medium TermManagement expects the Underlying RoCET1 2026 exit rate to be 15%.The underlying cost-to-income ratio 2026 exit rate is expected to be less than 70%.How Have Estimates Been Moving Since Then?It turns out, estimates review have trended upward during the past month.The consensus estimate has shifted 75% due to these changes.VGM ScoresCurrently, UBS has a subpar Growth Score of D, however its Momentum Score is doing a lot better with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of this revision looks promising. Notably, UBS has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.Performance of an Industry PlayerUBS is part of the Zacks Banks - Foreign industry. Over the past month, Barclays (BCS), a stock from the same industry, has gained 6.6%. The company reported its results for the quarter ended September 2024 more than a month ago.Barclays reported revenues of $8.52 billion in the last reported quarter, representing a year-over-year change of +7.5%. EPS of $0.56 for the same period compares with $0.42 a year ago.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report UBS Group AG (UBS): Free Stock Analysis Report Barclays PLC (BCS): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks